G.R. No.

L-24321             July 21, 1967

PHILIPPINE AIR LINES, INC., petitioner,

vs.
CIVIL AERONAUTICS BOARD and JACOB S. LIM, respondents.

Crispin D. Baizas and Associates and Edgardo Diaz de Rivera and Cenon S. Cervantes for
petitioner.
Eduardo R. Ceniza for respondent Lim.
Office of the Solicitor General Arturo A. Alafriz, Solicitor R. S. Goco and Albino S. Cordoba for
respondent Civil Aeronautic Board.

FERNANDO, J.:

Petition for certiorari by Philippine Air Lines (hereinafter referred to as PAL) to set aside and
declare void a resolution of February 4, 1965 of respondent Civil Aeronautics Board (hereinafter
referred to as CAB) approving the application of Jacob S. Lim, the other respondent, operator of
the Southern Air Lines, for a provisional permit to operate four (4) DC-3 aircrafts effective from
the date of the receipt of such resolution up to the time the decision by the CAB of his
application.

It was alleged by PAL and admitted by both respondents, that on or about February 18, 1963,
respondent Lim filed with respondent CAB an application to increase his equipment by four (4)
additional DC-3 aircrafts; that said application was referred to a CAB Hearing Examiner for
reception of evidence; that within the reglementary period, petitioner PAL entered its appearance
and manifested its opposition to the application with respect to necessity, mode, form, and
procedure; that on April 10, 1964, respondent Lim filed an Amended Application; that on April
20, 1964, petitioner PAL filed its Manifestation and Opposition to Amended Application; that
again on June 15, 1964, respondent Lim filed a Second Amended Application; and that while the
hearings before the Hearing Examiner were still being conducted, respondent Lim on September
8, 1964 filed an Application for a provisional authority to operate his proposed additional four
(4) DC-3 aircrafts. (Pars. 2 to 8, Petition).

It was alleged that the aforesaid application for provisional authority was opposed by petitioner
PAL (par. 9, Petition), but both respondents while admitting the fact of such opposition stressed
that it was made verbally during the hearing of the application before the respondent board (par.
2, Answer of Lim; par. 2, Answer of CAB). PAL further claimed that its opposition to the
application appears "well-founded" because the report dated October 27, 1964 of the hearing
Examiner recommended deferment of decision until the same was submitted for final decision.
Respondent CAB answered that the report of the, Hearing Examiner was "a conclusion devoid of
proper premises" and unduly going "weight or validity to petitioner's opposition which was made
only verbally" no grounds being specified (par. 3. Answer of CAB). Respondent Lim on the
other hand characterized said "verbal opposition" as having been "merely interposed as a sham,
as demonstrated by the fact that petitioner, having had the opportunity, never bothered to file a
formal opposition or memorandum setting forth specifically the grounds of its objections." (par.
6, Answer of Lim).
There is likewise admission by the respondents that in a CAB, letter dated January 27, 1965,
reference was made to CAB resolution of January 22, 1965 deferring action on Lim's
Application and requiring him to confer with the CAB staff concerning its computation showing
a loss of Ninety-Three Thousand (P93,000.00) Pesos for his operation of four (4) DC-3 aircrafts.
(par. 11, Petition). The allegation of the petition that not long thereafter, respondent CAB under
its Resolution of February 4, 1965, approved Lim's application for provisional authority, was
admitted by respondent CAB with the further averment that before such issuance, the matter was
heard by it on October 29, 1964, on January 22, 1965 and February 4, 1965 (par. 5, Answer of
CAB).

Such averment received a more extended treatment with documentary support in the Answer of
Lim to the effect that at the hearing on October 29, 1964, the CAB decided to defer action on
respondent's application for provisional authority until after the submission of a Project Study for
the development of rural services, a notarized contractual undertaking by a James L. Chiongbian
definitely showing a commitment to extend a loan of P1,000,000.00 for the acquisition of the
additional equipment of respondent and a Project Study for the operation of four (4) DC-3
aircrafts for scheduled domestic services; that on November 20, 1964, such revised Project Study
for the operation of four (4) DC-3 aircrafts on a non-scheduled basis, together with a program for
the development of a rural service, and a notarized undertaking of Chiongbian showing a definite
commitment to extend a loan in the amount of P1,000,000.00 to finance the acquisition of the
additional equipment were submitted; that on January 22, 1965, at the hearing of his application
for provisional authority, it was resolved to defer action on the application, its technical staff
being directed to confer with respondent Lim to ascertain the correctness of the computation of
the Hearing Examiner as to the estimated loss of P93,000.00 monthly, the extent of the proposed
service to be devoted to the development of rural areas and the proposed operation of such DC-3
service on a scheduled basis; that pursuant to said resolution, the technical staff of the CAB upon
prior notice to all existing airlines, including the petitioner PAL, convened a conference on
February 2, 1965, to thresh out the three above points, PAL however, not sending any
representative to such conference; that on February 3, 1965, a memorandum was submitted by
Lim to the CAB disproving the computation of the Hearing Examiner that there would be a loss
of P93,000.00 a month and showing the extent of his proposed rural service, as well as the
feasibility of operating on scheduled basis; that on February 4, 1965, his application for
provisional permit to operate was heard by the CAB "at which the profitability of respondent's
proposed DC-3 service, the extent of his proposed rural service, and the feasibility of operating
the proposed service on a scheduled basis were thoroughly discussed and debated by the
technical staff and herein petitioner PAL on one hand and the herein respondent on the other";
and that at the said meeting of the CAB on February 4, 1965, the CAB approved a resolution
granting said permit to operate his additional equipment consisting of four (4) DC-3 aircrafts.
(par. 5, Answer of Lim).1äwphï1.ñët

Thereafter on February 17, 1965, petitioner PAL filed a Motion for Reconsideration of tile CAB
Resolution of February 4, 1965. Lim filed his Opposition, the Motion for Reconsideration being
denied by CAB in its Resolution of March 4, 1965. (pars. 13-15, Petition).

Petitioner would thus have this Court declare void such CAB grant of provisional authority to
operate alleging denial of due process, assigning as alleged errors of CAB the failure to hear the
evidence which it could offer; the absence of any factual basis for the affirmative action on the
part of CAB, the findings of the Hearing Examiner being in fact opposed to the grant of
provisional authority; the absence of the reason for said grant; the absence of any finding of the
public need, urgent or otherwise, calling for said grant of authority and the failure to disclose to
it the documents or evidence which support the legality of the grant of the provisional authority
to operate. Tersely put, Ang Tibay vs. Court (69 Phil. 635), a 1940 landmark decision on the
"fundamental and essential requirements of due process in trial and investigations of an
administrative character" is invoked to show that CAB exceeded its jurisdiction or at the very
least acted with grave abuse of discretion.

That is the main issue before us. Before reaching it however, respondents would have us avoid
passing on the matter by setting a procedural obstacle. Both respondents speak of the
interlocutory character of the challenged resolution and for that reason, characterize it as non-
appealable. Such objection need not detain us long. It calls only for a summary disposition to
clear the path for the pivotal issue that calls for our determination. This is not a petition for
review under the Civil Aeronautics Act of the Philippines.1 Instead what we have here is the
special civil action of certiorari enabling a person aggrieved to complain against any tribunal,
board, or officer exercising functions judicial in character, acting without or in excess of
jurisdiction or with grave abuse of discretion.2 The availability of such remedy against
administrative agencies is now beyond dispute. Guiting v. Director of Lands, L-12906, Sept. 29,
1960; NDC v. Collector of Customs, L-19180, October 31, 1960; Taylor v. Gimenez, L-17656,
May 30, 1962; Sambrano vs. Public Service Commission, L-18459, Sept. 29, 1962; Filipino Pipe
and Foundry Corp. v. WCC, L-20381, Dec. 24, 1963; Phil. Rabbit Bus Line v. WCC, L-20614,
May 25, 1964; Malabon Restaurant v. Hearing Officer, L-22199, Jan. 31, 1966; Batangas
Laguna Tayabas Bus Co. vs. PSC, L-25994, Aug. 31, 1966).

Even in the absence of such decided cases, to name only a few, impressive for their number and
unanimity, and this were considered a question of first impression, the same conclusion is
unavoidable. The stage has been reached which in the current terminology of Administrative
Law is referred to a ripeness for judicial action, a matter in the language of an authority to be
determined not "by formula but by seasoned balancing of certain typical and relevant factors for
and against the assumption of jurisdiction."3 Why it should be thus is explained in this wise:
"Now that the judiciary is no longer generally hostile to the administrative process and has
established and accepted for itself a limited role, it need no longer operate in the gingerly self-
deprecating manner of a guilt-conscious, barely tolerated intruder. It need only ask how, given its
limited role, it can provide efficiently, with due regard for limited competence, the service which
it is duty bound to give to those who have a legitimate interest in the legality, of the challenged
action."4

Once assume that the problems posed by administrative action "are real and present or
imminent" not merely "abstract or hypothetical or remote" there is justification for the invocation
of the judicial machinery.5

The procedural hurdle out of the way, we are fact with our real problem. If the fundamental
canon of fairness embodied in the due process guaranty and required by the leading Ang Tibay
decision invariably followed subsequently (La Magalona & Co. v. The Workmen's
Compensation Commission and Pedro Geronca, L-10338, April 30, 1957; Dominador Danan, et
al. v. Aspillera, et al., L-17305, November 28, 1962; National Development Co., et al. v.
Collector of Customs, Manila, L-19180, October 31 , 1963; Vigan Electric & Light Co., Inc. v.
Public Service Commission, L-19850, January 30, 1964; Commissioner of Immigration v. Hon.
F. Fernandez, et al., L-22696, May 29, 1964; Manila Electric Co. v. Public Service Commission,
L-13638-40, June 30, 1964; Borja v. Morena, L-16487, July 31, 1964; Manila Electric Co. v.
Public Service Commission, L-24406, June 29, 1965; and Aboitiz Shipping Corp. v. Pepito, et
al., L-21335, Dec. 17, 1966) were set at naught and disregarded, petitioner is entitled to the
remedy prayed for. If such be the case, then the force of the above decisions calls for the setting,
aside of the challenged resolution.

Such is not the case however. The above recital of the circumstances under which the provisional
grant of authority to respondent Lim, a prior grantee of a certificate of public convenience and
necessity to increase his equipment by four (4) DC-3 aircrafts for the operation of the domestic
non-scheduled services, negates the imputation of arbitrariness on the part of respondent CAB. It
is undisputed that the CAB was not precipitate in approving such application for provisional
authority. It required a submission of a project study for the operation of the increased equipment
together with a program for the development of a rural service and a notarized undertaking by a
principal who would extend a loan in the sizeable amount of P1,000,000.00 to finance the
project. Moreover, there was a conference with prior notice to existing airlines to consider the
above points, PAL being notified but not sending any representative.

Nor should it be overlooked that respondent Lim asserted that before the resolution granting such
provisional permit to operate was granted by the CAB on February 4, 1965, there was a hearing
at which the profitability of Lim's proposed DC-3 service and the feasibility of such operation on
a scheduled basis were discussed and debated by the technical staff of the CAB as well as those
of PAL and respondent Lim. There was no express denial of such on assertion by PAL in its
Brief. Considering moreover that under the Civil Aeronautics Act, the CAB has the specific
power "to issue, deny, amend, revise, alter, modify, cancel, suspend, or revoke, in whole or in
part, upon petition or complaint or upon its own initiative any temporary operating permit,6 the
invocation by PAL of Ang Tibay vs. Court is futile and unavailing.

There is thus no reason to sustain petitioner's plea. The statute aside, it bears repeating that the
burden of showing essential unfairness must be shouldered by him who claims such injustice. In
this instance, the task proved too much for petitioner. The action taken by the CAB in granting
such provisional authority did not offend against procedural due process. Tested then either
under the controlling statute or the applicable judicial doctrines, the resolution of the CAB
cannot be set at naught and stigmatized as void.

Wherefore, this petition for certiorari is denied. Without costs.